Deutsche Bank reviewed market performance from late February to last Friday during the conflict, covering oil, bonds, European equities and precious metals. Over that span, oil and AI-related trades rose, while bonds, most European equities and precious metals fell. The bank framed the moves as part of a broader risk rotation across assets, rather than isolated reactions to daily newsflow.<\/p>\n
It added that the latest session\u2019s mix of lower oil prices and falling bond yields, alongside rising equities and precious metals, aligns with those earlier patterns. The commentary also referenced a 60-day negotiating period tied to a potential US\/Iran agreement, and pointed to developments involving Anthropic and the US government as further drivers of market focus.<\/p>\n
With the US\/Iran deal finally being struck, we believe the market is now unwinding the conflict-related trades of the past few months. WTI crude futures for July delivery fell over 8% to below $75 a barrel in early trading, a level not seen since March 2026. We expect this reversal to define market action over the coming weeks.<\/p>\n
We see the geopolitical risk premium evaporating from oil prices, suggesting further downside. This comes as recent data from early June showed OPEC+ production already exceeding quotas by a slight margin, adding to supply-side pressures. Traders should consider buying puts on oil ETFs to position for this continued weakness.<\/p>\n
The drop in oil is easing inflation fears, causing bond yields to fall and prices to rise. The US 10-year Treasury yield dropped 15 basis points to 3.85% this morning, its sharpest single-day fall in over a year. We anticipate this trend will continue, making long positions in bond futures an attractive strategy.<\/p>\n
For equities, lower energy costs and falling borrowing costs are a powerful tailwind, especially for European markets that were hit hard during the conflict. The Euro Stoxx 50 has already surged past the 5,200 mark, a key resistance level it failed to break throughout May 2026. We recommend buying call options on major European indices.<\/p>\n
As geopolitical tensions fade, we expect the AI narrative to reclaim its dominance. All eyes are now on potential agreements between Anthropic and the US government, which could unlock the next phase of the tech rally. We have seen implied volatility on call options for the PHLX Semiconductor Index (SOX) increase by 20% today, suggesting traders are already positioning for a significant move higher.<\/p>\n
Precious metals are also rallying, driven by the decline in bond yields which lowers the opportunity cost of holding non-yielding assets. This rally in gold alongside equities is reminiscent of periods of falling real yields, such as what we observed in late 2023, where both asset classes performed well simultaneously. We see value in call options on gold miners as a leveraged play on this move.<\/p>\n","protected":false},"excerpt":{"rendered":"
Deutsche Bank says US\/Iran deal unwinds conflict trades: oil drops, yields fall, equities and AI regain leadership.<\/p>\n","protected":false},"author":87,"featured_media":53011,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-52578","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t